Eutelsat Shareholders Face Significant Dilution from Deeply Discounted Capital Raise

Investors in Eutelsat are confronting a substantial dilution of their holdings as the satellite operator initiates a heavily discounted equity offering. The company has launched what market participants are describing as an aggressive capital increase, presenting existing shareholders with a critical decision point regarding their investment.

The financing arrangement, designed to strengthen the company's financial position, involves issuing new shares at a steep discount to current trading levels. The newly offered securities are priced at just €1.35 per share, significantly below recent market valuations and highlighting the urgency of the company's financial requirements.

Key details of the capital measure include:
* Subscription ratio: 8 new shares for every 11 existing shares held
* Subscription price: €1.35 per new share
* Rights trading period: Ongoing through December 5, 2025
* Subscription window: Opens tomorrow (November 28) and concludes December 9, 2025

Trading in the subscription rights began yesterday, with market response reflecting nervousness about the theoretical value adjustment to the share price.

Should investors sell immediately? Or is it worth buying Eutelsat?

Strategic Rationale Behind the Move

This substantial capital initiative forms the core of a comprehensive €1.5 billion financial package. The company had already placed an initial tranche worth €828 million on November 21. Management is pursuing this path to achieve two primary objectives: reducing the company's significant debt burden while simultaneously funding its costly strategic pivot toward LEO satellite technology and the IRIS² project.

Shareholder Dilemma

Current investors now face a challenging predicament. With the stock already trading "ex-rights," the apparent sharp price decline becomes technically explainable. Those who choose not to participate in the rights offering will see their proportional ownership stake in the company substantially diminished. The decision confronting investors is whether to commit additional capital to maintain their ownership percentage or immediately sell their rights on the Euronext Paris exchange.

Amid these developments, Eutelsat shares continue to represent a highly speculative investment, subject to considerable market volatility as this capital restructuring unfolds.